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Friday, July 29, 2011




On May 17, 2011, the Supreme Court approved changes to Rule 6:7-1(b)(2) and the form Execution against Goods and Chattels, which is Appendix XI-H to the Rules of Court, with those changes to be effective as of May 17, 2011. The amendments to Rule 6:7-1(b)(2) and Appendix XI-H were necessary in order to conform with new federal regulations that went into effect on May 1, 2011, requiring banks and other financial institutions to look back two months and exclude from garnishment any exempt benefits that were electronically deposited during that period. Rule 6:7-1(b)(2) only required a 45-day look back period, thus necessitating the amendments. Accompanying this Notice are the Court’s Order, the amended Rule and amended form.

Questions regarding the amendments to Rule 6:7-1(b)(2) and Appendix XI-H may be directed to Robert D. Pitt, Chief of Special Civil Part Services, in the Civil Practice Division of the Administrative Office of the Courts, P.O. Box 981, Trenton, NJ 08102.

Dated: June 8, 2011

/s/ Glenn A. Grant

Hon. Glenn A. Grant, J.A.D. Acting Administrative Director of the CourtsSUPREME COURT OF NEW JERSEY

It is ORDERED that the attached amendments to Rule 6:7-1(b) and Appendix XI-H of the Rules Governing the Courts of the State of New Jersey are adopted to be effective immediately.

Dated: May 17, 2011

For the Court, /s/ Stuart Rabner Chief Justice


Requests for Issuance of Writs of Execution; Contents of Writs of Execution and Other Process for the Enforcement of Judgments; Notice to Debtor; Claim for Exemption; Warrant of Removal; Enforcement of Consent Judgments and Stipulations of Settlement in Tenancy Actions

(a) ... no change

(b) Contents of Writs of Execution and Other Process for the Enforcement of Judgments. All writs of execution and other process for the enforcement of judgments shall provide that any levy pursuant thereto shall exclude:

(1) all funds in an account of the debtor with a bank or other financial institution, if all deposits into the account during the 90 days immediately prior to service of the writ were electronic deposits, made on a recurring basis, of funds identifiable by the bank or other financial institution as exempt from execution, levy or attachment under New Jersey or federal law, and

(2) all funds deposited electronically in an account of the debtor with a bank or other financial institution during the [45 days] two months immediately prior to [service of the writ] the account review undertaken by the bank or other financial institution in response to the writ that are identifiable by the bank or other financial institution as exempt from execution, levy or attachment under New Jersey or federal law.

(c) ... no change. (d) ... no change. (e) ... no change.

Note: Source – R.R. 7:11-1; former rule redesignated as paragraph (a) and paragraph (b) adopted and caption amended July 16, 1981 to be effective September 14, 1981; paragraph (b) amended November 1, 1985 to be effective January 2, 1986; caption amended and paragraph (c) adopted November 7, 1988 to be effective January 2, 1989; paragraphs (b) and (c) amended July 14, 1992 to be effective September 1, 1992; caption and paragraph (c), caption and text, amended July 13, 1994 to be effective September 1, 1994; paragraph (a) caption and text amended June 28, 1996 to be effective September 1, 1996; caption amended and paragraph (d) adopted July 18, 2001 to be effective November 1, 2001; paragraph (c) amended September 14, 2004 to be effective immediately; paragraph (a) amended July 27, 2006 to be effective September 1, 2006; caption

amended, former paragraph (b) redesignated as paragraph (c) and amended, former paragraphs (c) and (d) redesignated as paragraphs (d) and (e), and new paragraph (b) caption and text adopted July 23, 2010 to be effective September 1, 2010; subparagraph (b)(2) amended May 17, 2011 to be effective immediately.


___ DC-______-__ ___ VJ-_______-__ ____



DEBTORS:______________________ ______________________





TO: ___________________________________________ COURT OFFICER OF THE SPECIAL CIVIL PART

YOU ARE ORDERED to levy on the property of any of the debtors designated herein; your actions may include, but are not limited to, taking into possession any motor vehicle(s) owned by any of the debtors, taking possession of any inventory and/or machinery, cash, bank accounts, jewelry, electronic devices, fur coats, musical instruments, stock certificates, securities, notes, rents, accounts receivable, or any item(s) which may be sold pursuant to statute to satisfy this execution in full or in part. Any levy pursuant to this writ shall exclude (1) all funds in an account of the debtor with a bank or other financial institution, if all deposits into the account during the 90 days immediately prior to service of the writ were electronic deposits, made on a recurring basis, of funds identifiable by the bank or other financial institution as exempt from execution, levy or attachment under New Jersey or federal law, and (2) all funds deposited electronically in an account of the debtor with a bank or other financial institution during the [45 days] two months immediately prior to [service of the writ] the account review undertaken by the bank or other financial institution in response to the writ that are identifiable by the bank or other financial institution as exempt from execution, levy or attachment under New Jersey or federal law. All proceeds are to be paid to the court officer who shall pay them to the creditor or the attorney for the creditor, or, if this is not possible, to the court. This order for execution shall be valid for two years from this date.

Local police departments are authorized and requested to provide assistance, if needed, to the officer executing this writ. This does not authorize entry to a residence by force unless specifically directed by court order.

Judgment Date Judgment Amount................................................. Costs and Atty. Fees ............................................. Subsequent Costs .................................................. Total...................................................................... Credits, if any ....................................................... Subtotal A............................................................. Interest .................................................................. Execution costs and mileage ................................. Subtotal B ............................................................. Court officer fee.................................................... Total due this date................................................. Date: ________________.................................... Property to be Levied Upon and Location of Same:

CITY ST ZIP CREDITOR’S ATTORNEY AND ADDRESS: ______________________________________ ______________________________________ ______________________________________ CITY NJ ZIP Telephone: ___-__________

_________ $________ $________ $________ $________ $________ $________ $________ $________ $________ $________ $________

Date: ________________

_________________________________ Judge

_________________________________ Clerk of the Special Civil Part

I RETURN this execution to the Court

( ) Unsatisfied ___________________ ( ) Satisfied ( ) Partly Satisfied Amount Collected. . ____________

Fee Deducted. . . . . . ____________ Amount Paid to Atty.____________



______________________________ Court Officer

[REVISED MAY 17, 2011]

Tuesday, July 26, 2011

ARI MUTUAL INSURANCE V. JORGE A-1256-10T2 June 16, 2011



DOCKET NO. A-1256-10T2










Argued June 6, 2011 – Decided June 16, 2011

Before Judges Lisa and Reisner.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-3019-10.

Edward Rubenstone of the Pennsylvania bar, admitted pro hac vice, argued the cause for appellant (Lamm Rubenstone, L.L.C., attorneys; Christopher J. Fox and Frank Schwartz, on the brief).

Danielle M. Lozito argued the cause for respondent (Methfessel & Werbel, attorneys; Marc L. Dembling, of counsel and on the brief; Ms. Lozito, on the brief).


Defendant Antonio Jorge appeals from two orders dated September 28, 2010, denying his summary judgment motion, and granting summary judgment in favor of plaintiff ARI Mutual Insurance Company (ARI). We affirm.


Jorge is the sole owner of Zina Trucking, Inc. In July 2006, he applied to ARI for a commercial insurance policy covering the period August 1, 2006 to August 1, 2007. The first page of the application listed the "named insured and other named insured" as "Antonio Jorge dba [doing business as] Zina Trucking." Under the applicant's name, a box was checked designating the applicant as a "corporation." In the "BUSINESS AUTO SECTION" of the application, the applicant was listed as "Zina Trucking Inc." Accordingly, ARI issued a policy on which the declarations page listed "Zina Trucking Inc[.]" as the named insured. Jorge did not ask ARI to correct the policy to reflect a different named insured.

The policy contained a step-down clause, providing that if a covered person, other than a named insured, was involved in an accident and had other auto insurance, the $1 million in Uninsured Motorists (UM) coverage under the ARI policy would be reduced to the limits of the covered person's own policy. The relevant language is as follows:

. . . if:

(1) An "insured" is not the individual named insured under this policy;

(2) That "insured" is an individual named insured under one or more other policies providing similar coverage; and

(3) All such other policies have a limit of insurance for similar coverage which is less than the Limit of Insurance for this coverage; then the most we will pay for all damages resulting from any one "accident" with an "uninsured motor vehicle" . . . shall not exceed the highest applicable limit of insurance under any coverage form or policy providing coverage to that "insured" as an individual named insured.

On November 27, 2006, about four months after purchasing the policy, Jorge was involved in an accident while driving the Zina truck. Claiming that the accident was caused by a phantom vehicle, he sought UM coverage under the ARI policy. ARI filed a declaratory judgment complaint against Jorge and his personal auto insurer, Allstate New Jersey Insurance company, contending that the $1 million of UM coverage under the ARI policy should be stepped down to $100,000, which was the level of UM coverage available under Jorge's Allstate policy.1

Jorge moved for summary judgment, contending that ARI mistakenly listed Zina Trucking as the named insured in the policy, when he had applied for coverage as the individual named insured. In support of the motion, Jorge filed a certification, attesting that at the time he applied for the ARI policy, he understood that he "would be the named insured under any policy to be issued by ARI pursuant to the Application." He attested that he signed the application in his individual capacity, and he would not have purchased that policy if he "had known that ARI intended to change the named insured from myself to Zina Trucking, Inc." He further stated that he did not receive a copy of the policy document until after he purchased the policy. ARI cross-moved for summary judgment.

At oral argument of the motion, Jorge's counsel agreed that he was not challenging the validity or enforceability of the step-down clause. Rather, he argued that, given the way Jorge completed and signed the application, he had a "reasonable expectation" that he would be the named insured. He also argued that any ambiguity, created by a difference between the application and the policy, should be resolved in the insured's favor. Third, he contended that even if Zina Trucking was the named insured, Jorge should be deemed the "alter ego" of the corporation, because he was its sole shareholder.

In an oral opinion placed on the record on September 24, 2010, Judge Phillip Lewis Paley found that the policy unambiguously listed Zina Trucking Inc. as the named insured. He reasoned that Jorge had a duty to read the policy and ask ARI to correct it if he believed his company should not have been listed as the named insured. He concluded:

[D]efendant's expectation that he was a named insured is unreasonable in light of the plain language of the policy. He was in possession of the insurance policy naming [Zina] Trucking as the named insured for several months before the accident.

I cannot ignore the obligation imposed upon him by law to read the plain language of the policy. While it may be that he had a reasonable expectation of coverage as a named insured when he signed his application, his failure to read and/or protest the plain language of the policy as written until after his accident makes his belief unreasonable.

The judge further found that there was no mutual mistake, and no evidence that ARI committed any fraud or unconscionable conduct. He also concluded that any ambiguity was created by Jorge, who listed Zina Trucking as the insured in filling out the application.


Our review of the trial court's summary judgment decision is de novo. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Using the Brill2 standard, we determine whether, giving the non-moving party the benefit of all favorable inferences, the undisputed material facts entitle the moving party to judgment. SeeEstate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 374 (2010). After reviewing the record, we conclude that Judge Paley correctly granted summary judgment in favor of ARI.

In Pinto v. New Jersey Manufacturers Insurance Co., 183 N.J. 405 (2005), the Supreme Court held that step-down clauses in insurance policies were enforceable. A 2007 statute superseded Pinto by making step-down clauses unenforceable, N.J.S.A.17:28-1.1(f), but Jorge concedes that the statute is not retroactive. See Olkusz v. Brown, 401 N.J. Super. 496, 499 (App. Div. 2008).3

Instead, as in the trial court, he seeks to circumvent Pinto by arguing that: the insurance policy "materially differed" from the application; when read together with the application, the policy should be deemed "ambiguous," and the ambiguity should be construed in Jorge's favor and consistent with his reasonable expectations; the UM/UIM endorsement of the policy defines an insured as a natural person whose "family members" will be covered, thereby misleading Jorge into believing that he was the named insured.

We agree with Judge Paley that these arguments are all without merit. They require no further discussion here, R. 2:11-3(e)(1)(E), and we affirm substantially for the reasons stated in Judge Paley's opinion. We add the following comments.

In completing the insurance application, Jorge did not indicate that he was applying for insurance or signing the form in his individual capacity, as opposed to in his capacity as owner of the business. The application listed "Antonio Jorge dba Zina Trucking" as the named insured, and immediately thereafter indicated that the applicant was a corporation. In a later section of the application, the applicant was listed only as Zina Trucking Inc. The declarations page of the insurance policy unambiguously listed Zina Trucking Inc. as the named insured. See Lehrhoff v. Aetna Cas. & Sur. Co., 271 N.J. Super. 340, 347 (App. Div. 1994) (ordinarily a policy's declarations page "must be deemed to define coverage and the insured's expectation of coverage").

Upon receiving the policy, Jorge did not object or advise his insurance agent that there was a mistake on the declarations page. "'When an insured purchases an original policy of insurance he may be expected to read it and the law may fairly impose upon him such restrictions, conditions and limitations as the average insured would ascertain from such reading.'" Morrison v. Am. Intern. Ins. Co. of Am., 381 N.J. Super. 532, 542 (App. Div. 2005) (quoting Bauman v. Royal Indem. Co., 36 N.J. 12, 25 (1961)).

Nor is the UM/UIM endorsement ambiguous. The relevant portion of the endorsement indicates that "If the Named Insured is designated in the Declarations as . . . An individual" then the insured's family members are also covered by the policy. The next section provides that if the insured is a corporation, the corporation's employees are insured. These sections control who is entitled to UM coverage under the policy. They do not address the level of that coverage. The amount of coverage is separately controlled by the step-down clause. Jorge's reliance on Progressive Casualty Insurance Co. v. Hurley, 166 N.J. 260, 272 (2001), and O'Hanlon v. Hartford Accident & Indemnity Co., 639 F.2d 1019, 1023 (3d Cir. 1981), is misplaced. Those cases deal with whether individual owners of small businesses, or their family members, are entitled to UM coverage; they do not address step-down clauses.

In an argument raised for the first time on appeal, Jorge argues that ARI should be estopped from enforcing the step-down clause because the insurer allegedly did not act promptly in denying coverage beyond that provided under the clause. We decline to consider this argument, because Jorge did not raise it in the trial court. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). Similarly, we will not consider his argument, raised for the first time in a footnote in his reply brief (and not supported by any record evidence), that ARI allegedly failed to counsel him about the step-down clause. See Pinto, supra, 183 N.J. at 417 (prospectively requiring insurers to tell commercial insurance applicants that individual employees must be named insureds to avoid operation of the step-down clause).4


1 Jorge filed a separate complaint and an order to show cause, seeking UM arbitration.

2 Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

3 The ARI policy was issued, and expired, before the 2007 legislation was passed. See Hand v. Philadelphia Ins. Co., 408 N.J. Super. 124 (App. Div.) (disagreeing with Olkusz on the retroactivity issue, but declining to apply N.J.S.A. 17:28-1.1(f) to the plaintiff's claim because the relevant insurance policy expired before the statute was enacted), certif. denied, 200 N.J. 506(2009).

4 Although Jorge filed suit against ARI to require UM arbitration, he did not sue the insurance agent who allegedly assisted him in filling out the insurance application and allegedly failed to advise him about the step-down clause.

RANGAR ASSOCIATES V. VINCI A-5607-09T4 June 16, 2011



DOCKET NO. A-5607-09T4











Argued May 3, 2011 – Decided June 16, 2011

Before Judges Wefing, Baxter and Koblitz.

On appeal from Superior Court of New Jersey,

Law Division, Sussex County, Docket No. L-617-06.

Walter G. Luger argued the cause for appellant

(Walter G. Luger & Associates, attorneys; Mr. Luger,

of counsel and on the brief; Vincenzo M. Mogavero,

on the brief).

Philip A. Parziale argued the cause for



Defendant Robert J. Pellechio, Jr., appeals from a trial court order denying his motion to vacate a default judgment entered against him. After reviewing the record in light of the contentions advanced on appeal, we modify the trial court’s order and, as modified, we affirm it.

Pellechio, together with defendants John J. Montefusco, Jr. and Matthew S. Vinci, was a principal in a limited liability company, MPA Insurance Agency, L.L.C. (“MPA”), which was engaged in selling personal and commercial lines of insurance. Plaintiff Rangar Associates, L.L.C. (“Rangar”) is a limited liability company whose principals are Mark Ranucci and Robert C. Garofalo, Esq. In December 2004, Rangar and MPA formed a new limited liability company, MPA Insurance Agency/South, L.L.C. (“MPA/South”); and in March 2004, Rangar invested $100,000 in MPA/South. According to Rangar's complaint, MPA, in return, was to provide MPA/South with access to insurance carriers, computer software and technology.

In July 2005, the principals of MPA dissolved that entity, and defendant Pellechio thereafter formed his own business, Pellechio Insurance Agency. The record indicates that following that dissolution, defendant Montefusco continued for a period of time to provide insurance services to MPA/South. Eventually a dispute arose between plaintiff and Montefusco with respect to commissions to which plaintiff claimed entitlement, but Montefusco did not pay. In August 2006, Rangar filed suit, seeking damages for what it alleged was MPA’s breach of the operating agreement for MPA/South and commissions plaintiff alleged were due to it. Plaintiff named as defendants MPA and its principals, Montefusco, Vinci and Pellechio.1

Pellechio was served both at his residence and his place of business; on each occasion service was achieved through service on his wife. Pellechio did not file an answer, and default was entered against him on November 28, 2006. On July 31, 2007, the clerk entered a default judgment against Pellechio for $100,000, the damages claimed in plaintiff’s complaint.

Defendant did not formally seek relief from that judgment until May 2010, when, nearly three years after its entry, he filed a motion under Rule 4:50-1(a) to vacate that default judgment. In the interim, plaintiff was contacted on three occasions by different attorneys on behalf of Pellechio with respect to setting aside that default judgment. Defendant supported his motion with certifications denying that proper service had been made. The certifications noted that the return of service indicated service had been achieved at One Wilson Avenue in Randolph while Pellechio lived at One Wilson Avenue in Chester. The certifications also noted a dispute as to the physical description of Mrs. Pellechio, the person upon whom service had been achieved.

In opposing defendant’s motion to vacate the default judgment, plaintiff pointed out that One Wilson Avenue in Randolph is the same location as One Wilson Avenue in Chester; Randolph is merely the address that is used for purposes of mailing. Plaintiff also enclosed a copy of a letter its attorney had received in March 2007, before the default judgment was entered, enclosing a consent order vacating the default. The letter raised no issue with respect to service. Plaintiff also enclosed a copy of a second letter, dated June 4, 2008, from the attorney who filed the motion seeking relief from the default judgment. In that letter, the attorney acknowledged the outstanding judgment, but set forth his position that there was no basis for a judgment against Pellechio, individually. He requested that the judgment be removed. This letter, sent nearly two years before the motion was filed, again raised no question with respect to service.

After hearing oral argument, the trial court denied defendant’s motion, finding that the nearly three-year delay in seeking relief precluded the court from concluding that there was excusable neglect for defendant’s failure to act. This appeal followed.

Defendant presents a variety of arguments on appeal, only one of which, in our judgment, has any legal merit. With respect to the bulk of his contentions, we agree entirely with the trial court that defendant failed to establish that he had acted with reasonable diligence and that any delay on his part was due to excusable neglect.

Defendant brought his motion under subsection (a) of Rule 4:50-1, which permits a trial court to set aside a judgment entered as a result of mistake, inadvertence, surprise, or excusable neglect. Rule 4:50-2 specifies, however, that applications under subsection (a) must be brought within one year of entry of the judgment. Here, the more than three-year delay removed plaintiff from the scope of this subsection of the rule.

In its brief oral opinion, the trial court also noted that to the extent defendant sought relief under any other portion of the rule, he was required to act within a reasonable time of the judgment having been entered. R. 4:50-1(f); R. 4:50-2. Before the trial court and before us, defendant attempted to attribute a large portion of this delay to inaction on the part of the first attorney defendant had retained to set aside the judgment and difficulties the second attorney allegedly experienced in locating plaintiff’s attorney after that attorney relocated his office. Even if we were to assume that those two factors played some role in the delay, defendant was obligated to take reasonable steps to see that his interests were being protected. We agree with the trial court that the record precludes a conclusion that defendant acted with anything approaching reasonable diligence and that the three-year period between entry of the judgment and filing the motion could not be considered a reasonable time in the context of this matter.

We do agree, however, that judgment for $100,000 was improperly entered by the clerk. Under Rule 4:43-2(c), the clerk may, in the event of a default, enter judgment for a sum certain. Plaintiff’s claim for damages, however, cannot be fairly categorized as a book account.

Plaintiff was required to prove its damages at a proof hearing after which the trial court would conclude whether, and to what extent, plaintiff had established that it was entitled to monetary relief, as well as the party against whom relief should be granted. We thus remand this matter to the trial court for further proceedings, which shall include such a proof hearing. The manner and extent to which defendant shall be permitted to participate in that proof hearing is a matter that rests within the discretion of the court presiding over that proof hearing.

We thus affirm the order of the trial court denying defendant’s motion to set aside his default, vacate the judgment that had been entered, and remand the matter to the trial court for further proceedings.

1 The record indicates that Montefusco has filed bankruptcy; it is silent with respect to Vinci.

Wednesday, June 22, 2011

Complaint Has to be Served on Defendant or its Designated Agent: Thomas v. Monmouth Properties LLC

Complaint Has to be Served on Defendant or its Designated Agent

Thomas v. Monmouth Properties LLC



DOCKET NO. A-6159-09T3

Submitted May 4, 2011 – Decided June 15, 2011

Before Judges Sapp-Peterson and Simonelli.

On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Monmouth County, Docket No. DC-11325-10.


In this appeal, the trial court, following a bench trial, awarded plaintiff $3000 in damages after finding that defendant illegally locked plaintiff out of her apartment. Defendant sought reconsideration, arguing that the court proceeded to trial despite the fact that defendant had not been given notice of the proceeding, thereby depriving defendant of the opportunity to present witnesses on its behalf. We reverse.

On May 27, 2010, plaintiff filed a verified complaint and order to show cause (OTSC) seeking an order restoring her to possession of her apartment, which she leased from defendant. In her verification, plaintiff stated:

When I came to my residence that afternoon [May 24, 2010] I could not go into the apartment [due] to the top [and] bottom lock[]s were changed. I called the Long Branch Police - Mr. Shamrock! He called the landlord [and] then told me to remove the rest of my property in [twenty] minutes[.] [T]his was approximately 4:45 p.m. The landlord stated that I abandoned the property[,] which I did not.

The verified complaint was not served upon defendant or its designated agent. Rather, notice of the verified complaint and OTSC was given to defendant's property manager, Arlette Muss (Muss). Later that day, an individual identifying himself as a legal assistant to the Special Civil Part judge telephoned defendant's attorney requesting that counsel appear before the court the next morning.

Defense counsel advised the court's legal assistant that he had just been informed by Muss that plaintiff had agreed to vacate the premises in lieu of being evicted for non-payment of rent and that she had in fact vacated the premises but was now claiming that she had been locked out. Counsel also informed the legal assistant that he had not received any papers from plaintiff. Counsel inquired as to the purpose of the proceeding before the court and advised the legal assistant that if the court intended to conduct a hearing, defendant wanted the opportunity to subpoena witnesses. The legal assistant assured counsel that the proceeding was merely an initial appearance on the OTSC.

Counsel, along with Muss, appeared before the court the next day as directed. Counsel immediately placed on the record the fact that he had been contacted by the court to appear but had not been served with any papers. Counsel also informed the court that a summary dispossess action had previously been filed against plaintiff and that defendant was awaiting a hearing date from the court. Despite counsel's representations of no notice, the court proceeded to conduct a full hearing during which plaintiff and Muss testified.

Plaintiff testified that on May 24, when she came home, the locks had been changed. She called the police, who responded to the scene shortly thereafter and contacted Muss, who advised police that plaintiff had abandoned her apartment. Plaintiff indicated she told Muss that she was "supposed to be moving," but that she had not moved and "still had stuff there[.]"

Muss testified that earlier in the month, plaintiff agreed to voluntarily vacate the premises around May 22 in lieu of an eviction proceeding. Muss memorialized this arrangement in a May 10 letter. Muss told the court plaintiff had given defendant permission to enter the apartment to show it to prospective tenants and that plaintiff had removed ninety-five percent of her belongings, leaving behind what appeared to be garbage. Muss explained that the summary dispossess action was not withdrawn in order to protect defendant's interest.

At its conclusion, the court found that while plaintiff may have intended to move, she had not vacated the apartment and defendant had therefore engaged in an illegal lockout. The court noted that plaintiff had not surrendered her keys and indicated that it "sense[d] that maybe [plaintiff] received some pressure from Long Branch Police that . . . based on the representations made known to the Long Branch Police at the time was that . . . her stuff was out, she had to move." The court proposed three solutions: (1) permitting plaintiff's re-entry into her apartment; (2) providing another apartment to plaintiff in the Long Branch area; (3) awarding "a financial payment to accommodate her in a hotel."

Plaintiff and defendant conferred outside of the presence of the court. When it was determined that re-entry would not be possible, Muss offered to make an apartment, located in Keansburg, available to plaintiff and her children, rent-free, for a reasonable period. Plaintiff accepted the proposal. The agreement was put in writing and signed by both parties. The court reviewed the agreement but rejected it, stating, "this is not what I had in mind[.]" The court then awarded plaintiff $3000 in damages with $1500 representing the penalty for the illegal lockout and the remaining $1500 representing rent for thirty days.

Defendant moved for reconsideration. Defense counsel submitted a certification in support of the motion in which, among other points raised, he reiterated the circumstances surrounding his first notice of the OTSC on May 27, the telephone call from the court's legal assistant requesting that he appear in court the next day, and assurances from the court's legal assistant that the matter would not yet proceed to trial at that time. Defense counsel's certification also referenced plaintiff's post-hearing admission, in the presence of a court officer, that she filed the verified complaint because she would not qualify for financial assistance in the absence of an eviction. Additionally, defense counsel attached what he represented were "before" and "after" photographs of plaintiff's apartment as evidence that plaintiff had in fact vacated the apartment. The court denied the motion, finding that defendant failed to demonstrate that the court made its earlier decision "on a palpably incorrect or irrational basis or failed to consider competent relevant evidence."[1]

On appeal defendant contends it was denied the opportunity to present witnesses who would testify that plaintiff voluntarily vacated the apartment in accordance with their agreement. Further, defendant contends there was no basis for the court to have disregarded the agreement the parties reached. We agree.

The scope of our review of a judgment entered in a non-jury case is limited. We will not disturb the findings and legal conclusions upon which the judgment was based unless we are convinced they are "so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974) (citation and internal quotation marks omitted). Here, it is not that the judge's decision is manifestly unsupported by the competent, relevant and reasonably credible evidence in the record. Rather, it is the undisputed fact that the court conducted a full hearing on an OTSC without affording defendant an opportunity to present witnesses and other proofs establishing that plaintiff had voluntarily entered into an agreement to vacate the premises in lieu of an eviction proceeding and future action for unpaid rent. Peterson v. Peterson, 374 N.J. Super. 116, 125 (App. Div. 2005) ("[A]s a matter of fundamental fairness, defendant had the right to present witnesses in his defense."). Although we recognize the urgency presented to the court by a lockout unaccompanied by any court order, the court, pursuant to Rule 4:52-1, could have entered an order providing for interim relief if it was satisfied "from specific facts shown by affidavit or verified complaint that immediate and irreparable damage will probably result to the plaintiff before notice can be served or informally given and a hearing had thereon."

Further, N.J.S.A. 2A:39-6 permits the court to proceed in a summary manner in lockout proceedings. Therefore, the provisions governing summary actions under Rule 4:67-2 may have been employed to provide interim relief to plaintiff while at the same time affording proper notice to defendant and a meaningful opportunity to be heard. Hyman v. Muller, 1 N.J. 124, 128-29 (1948). Given the procedural deficiencies evident here, reversal is warranted.

In light of our reversal, we need not address defendant's remaining argument other than to state that there is nothing under our anti-eviction laws that precluded the parties from resolving their differences through settlement, provided the court is satisfied the agreement was reached knowingly, voluntarily, and with a full understanding of the consequences of a settlement. "[P]arties to a dispute are in the best position to determine how to resolve a contested matter in a way which is least disadvantageous to everyone." Dep't of Pub. Advocate v. N.J. Bd. of Pub. Util., 206 N.J. Super. 523, 528 (App. Div. 1985). Because the trial judge made certain factual findings relative to the merits of plaintiff's claim, in fairness to the judge, a different judge should preside over the remand proceedings.

Reversed and remanded for a new trial or further proceedings consistent with this opinion. We do not retain jurisdiction.

[1] The order mistakenly refers to "plaintiff" as not demonstrating that the court made its earlier decision "on a palpably incorrect or irrational basis or failed to consider competent relevant evidence."

Tuesday, June 21, 2011

Error to Compel Arbitration of the Contractual and Negligence Claims: Wilson v Woodfields at Princeton Highlands

Error to Compel Arbitration of the Contractual and Negligence Claims

Wilson v Woodfields at Princeton Highlands



DOCKET NO. A-6277-08T1

Submitted January 10, 2011 - Decided

Before Judges Grall, C.L. Miniman and LeWinn.

On appeal from Superior Court of New

Jersey, Law Division, Middlesex County,

Docket No. L-6262-07.


Plaintiff Stevonne Wilson entered into a contract to purchase from a developer-builder a new home to be built on a lot subject to the bylaws of the Woodfield Estates Homeowners Association (the Association). The contract was executed in July 2000 and the transaction closed on July 18, 2001. On July 17, 2007, Wilson filed a complaint seeking damages for misrepresentations in connection with the construction and sale of the home, construction defects and overcharging of Association fees. She alleged breach of contract, negligence, common law fraud and violations of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42. Wilson named several defendants: the developer-builder defendants — Woodfield Developers, L.L.C., its agents Jonathan Frieder and Roy Lomassaro, Woodfields at Princeton Highlands and Garden Homes; the Association and its property managers; the municipality and its inspectors; and an employee of the Department of Community Affairs. The Association filed a counterclaim seeking payment of dues owed. As of June 30, 2009, all claims as to all parties were resolved, and Wilson filed a notice of appeal on August 11, 2009.

On appeal, Wilson argues that the judge erred in granting the developer-builder defendants' motion to dismiss her claims in accordance with an arbitration clause in the sales contract. She also contends that the judge erred in awarding the Association $9450.96 in counsel fees because the Association accepted $365.63 to settle its counterclaim. Wilson does not raise any issue involving another party. As the issues are distinct, we address the judge's determinations regarding arbitration and counsel fees separately.



We first consider the builder-developer defendants' (hereinafter defendants) claim that we lack jurisdiction to hear Wilson's appeal from the order compelling arbitration because it was not timely filed. We reject the argument.

The order compelling arbitration of Wilson's claims against defendants was entered on October 19, 2007. On April 14, 2008, through its decision in Wein v. Morris, 194 N.J. 364 (2008), the Supreme Court prospectively amended Rule 2:2-3 to add orders compelling arbitration to the list of those that are deemed appealable as of right regardless of whether all claims as to all parties have been resolved. Id. at 380.

Because the rule established was "new," the Court gave it purely prospective application and did not apply the new rule in that case. Ibid. When a rule is purely prospective, it applies "'only to cases whose operative facts arise after the new rule is announced.'" State v. Feal, 194 N.J. 293, 308 (2008) (quoting State v. Burstein, 85 N.J. 394, 403 (1981)). Here, the "operative" fact is the entry of the order compelling arbitration and that occurred before, not after, the new rule in Wein was announced. See GMAC v. Pittella, ___ N.J. ___, ___ (2011) (slip op. at 30) (holding that orders denying arbitration are also appealable as of right and that from the date of the decision in GMAC forward, the time for appeal from an order denying arbitration starts on the date the order is entered). Thus, Wilson's appeal was not subject to Wein's new rule and was properly filed within forty-five days of the last order that resolved an outstanding claim. R. 2:4-1(a); N.J. Schs. Constr. Corp. v. Lopez, 412 N.J. Super. 298, 308 (App. Div. 2010). We have jurisdiction to review the order compelling arbitration.


Wilson's complaint included these allegations relevant to her claims against defendants and we must accept them as true. Printing Mart-Morristown v. Sharp Elecs., 116 N.J. 739, 746 (1989). Defendants made and she relied on affirmative misrepresentations in connection with the sale of her home — misrepresentations about the quality of construction and materials, square footage of the residence, and amenities to be made available to members of the Association such as recreational facilities. Additionally, defendants withheld information material to her decision to purchase the lot and home — wetlands and groundwater conditions on- and off-site that led to regular flooding. She was dissatisfied with conditions she observed during the final walkthrough, but due to her race and gender she was pressured and coerced to close with a threat of per diem charges. After closing, she suffered from problems such as water gushing onto the sidewalks and ponding in the side and rear lawns. Her basement flooded twice, and she learned that essential support beams were not installed and the foundation was cracked and unstable.

The arbitration clause at issue on this appeal was included in the contract of sale. The terms of that contract were negotiated by Wilson's attorney. On Wilson's behalf, her lawyer sought, among other amendments not relevant here, removal of the arbitration clause and of a clause addressing dispute resolution under the New Home Warranty and Builders' Registration Act, N.J.S.A. 46:3B-1 to -20. Although defendants refused to delete those clauses, on July 15, 2000, Wilson agreed to the contract without those changes. The transaction closed on July 18, 2001.

The contract includes a section entitled "12. HOMEOWNERS WARRANTY." It requires defendants to provide insurance-backed warranty coverage under the New Home Warranty Act. Subsection (f) of Section 12 addresses dispute resolution as follows:

Buyer and Seller acknowledge and agree that the warranty and insurance remedies contained in the homeowner warranty provided by Seller to Buyer constitute Buyer's remedy of first recourse. The parties agree that the conciliation and arbitration procedures outlined in the Homeowners Warranty Act are better suited to the determination of outstanding issues, if any, between the parties than any remedy which may be secured by resort to legal process. Buyer represents that he has read the act to which reference is made and that he has secured the advice of counsel in making this election of remedies. This election of remedies shall survive closing of title.

Arbitration is addressed in subsection e of Section 15, "DEFAULTS OF BUYER AND SELLER":


According to Wilson's complaint, she pursued remedies for "some of the defects through the New Home Warranty Act" but was dissatisfied with the outcome, which she alleged was attributable to the arbitrator's relationship with defendants. The parties' disagreement on appeal centers on the enforceability of the arbitration clause.

Wilson, acting pro se in the trial court and on appeal, argues the arbitration clause is unenforceable because it gives insufficient notice of her waiver of the statutory right to a jury trial on her LAD and CFA claims. Because we agree and reverse the order compelling arbitration on that ground, we do not address Wilson's other claims of error related to the dismissal of her claims against defendants.

There is no question that arbitration is a favored and encouraged means of resolving disputes. Barcon Assocs., Inc. v. Tri-County Asphalt Corp., 86 N.J. 179, 186 (1981). Federal law "'requires courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms.'" Curtis v. Cellco P'ship, 413 N.J. Super. 26, 33-34 (App. Div.) (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 478, 109 S. Ct. 1248, 1255, 103 L. Ed. 2d 488, 500 (1989)), certif. denied, 203 N.J. 94 (2010); see Martindale v. Sandvik, Inc., 173 N.J. 76, 84 (2002). Moreover, "[a]n agreement to arbitrate should be read liberally in favor of arbitration." Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 132 (2001) (internal quotations omitted); accord Curtis, supra, 413 N.J. Super. at 34; Griffin v. Burlington Volkswagen, Inc., 411 N.J. Super. 515, 518 (App. Div. 2010). Nevertheless, because an agreement to arbitrate is a contract, a party cannot be compelled to arbitrate claims not encompassed by the agreement. Garfinkel, supra, 168 N.J. at 132.

With respect to consumer agreements, "a clause depriving a citizen of access to the courts should clearly state its purpose. The point is to assure that the parties know that in electing arbitration as the exclusive remedy, they are waiving their time-honored right to sue." Marchak v. Claridge Commons, 134 N.J. 275, 282 (1993). In this context, an agreement to arbitrate statutory claims is enforceable when the contract provisions "(1) contain language reflecting a general understanding of the type of claims included in the waiver; or (2) provide that, by signing, the consumer agrees to arbitrate 'all statutory claims arising out of the relationship,' or any claim or dispute based on a federal or state statute." Curtis, supra, 413 N.J. Super. at 35-36 (quoting Gras v. Assocs. First Capital Corp., 346 N.J. Super. 42, 56-57 (App. Div. 2001), certif. denied, 171 N.J. 445 (2002)).

This agreement to arbitrate "any disputes arising in connection with this agreement and/or any amendments to this agreement" does not suggest waiver of the right to bring a suit in court on a statutory claim. In that regard, this arbitration clause is distinguishable from those addressed in Curtis and Griffin. In Curtis, the language unmistakably specified that plaintiff waived his right to a judicial forum and jury trial. 413 N.J. Super. at 37-38. In Griffin, the clause included language referencing statutory claims. 411 N.J. Super. at 518.

We also conclude that the agreement to arbitrate contractual claims, while sufficiently clear when read alone, is not at all clear when the agreement is read as a whole. The contract does not articulate or explain the relationship between the clause addressing alternate dispute resolution under the New Home Warranty Act and the arbitration clause. Read together, these provisions are so confusing that they "confound[] any clear understanding of the parties' undertaking" with respect to resolution of disputes. See Rockel v. Cherry Hill Dodge, 368 N.J. Super. 577, 583 (App. Div.), certif. denied, 181 N.J. 545 (2004). Accordingly, we conclude that it was error to compel arbitration of the contractual and negligence claims as well.

We recognize that Wilson was represented by an attorney who unsuccessfully attempted to negotiate removal of both the dispute resolution and the arbitration clauses. While that fact weighs heavily against Wilson's claim of unconscionablity, it is irrelevant to the adequacy of the contractual language.


Wilson's objections to the order awarding counsel fees to the Association also have merit. The trial court awarded fees for services rendered prior to the date that the Association filed its counterclaim for assessments owed, but the Association is not entitled to fees unrelated to its collection effort. Moreover, the trial judge failed to consider the reasonableness of $9450.96 in counsel fees in light of the small recovery obtained by the Association.

As noted above, Wilson and the Association reached an agreement that resolved the Association's counterclaim against Wilson for past-due fees. Wilson agreed to pay $365.63 and that agreement was memorialized in a consent order. In the consent order, the Association reserved its right to file an application for counsel fees and Wilson reserved her right to oppose it.

The Association's claim for fees is dependent upon Section 4.02 of the Declarations and Covenants in Wilson's chain of title. Section 4.02 provides that assessments by the Association "together with any charges, interest, and costs of collection, including reasonable attorney's fees, shall be a charge and shall constitute a continuing lien" against the property.

A "prevailing party can recover . . . fees if they are expressly provided for by statute, court rule, or contract." Litton Indus. Inc. v. IMO Indus. Inc., 200 N.J. 372, 385 (2009) (internal quotations omitted); N. Bergen Rex Transp. v. Trailer Leasing Co., 158 N.J. 561, 569-70 (1999). Although Section 4.02 entitles the Association to fees connected with collecting Wilson's delinquent dues, neither the consent order nor Section 4.02 entitles the Association to fees for costs incurred in defending against Wilson's complaint. Nevertheless, the certification of services submitted by the Association's attorneys includes fees charged for work done in defending the Association against Wilson's claim. Because it appears that the award includes fees to which the Association is not entitled, a remand is required.

In addition, counsel fees must be reasonable. N. Bergen Rex Transp., supra, 158 N.J. at 570. Pursuant to Furst v. Einstein Moomjy, 182 N.J. 1, 23 (2004), and Rule of Professional Conduct 1.5(a)(4), the amount in dispute and the results obtained are relevant to the reasonableness of the fee sought. We direct the judge to consider that factor along with other pertinent factors when fixing the fee on remand. We also note that if the Association's counsel wishes to be paid for time billed by its paralegal, it must comply fully with Rule 4:42-9(b), including disclosure of the firm's billing rate for paralegal services to clients generally.

Reversed and remanded. We do not retain jurisdiction.

[1] Improperly pled as Woodfield Developers.

Sunday, June 19, 2011

Eviction granted based on habitual hardship 2714 SUMMIT AVE., L.L.C. v ELSA JIMENEZ,

Eviction granted based on habitual hardship 2714 SUMMIT AVE., L.L.C. v ELSA JIMENEZ,



DOCKET NO. A-2413-09T1

Submitted May 17, 2011 - Decided

Before Judges Payne and Baxter.

On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Hudson County, Docket No. LT-16562-09.

Defendant Elsa Jimenez appeals from a judgment for possession granted to her landlord, plaintiff 2714 Summit Ave., L.L.C., premised on her habitual late payment of rent. N.J.S.A. 2A:18-61.1(j). We affirm.

Plaintiff owns property located at 2714 Summit Avenue in Union City, where defendant has been a month-to-month tenant on an oral lease since June 7, 1994. Plaintiff acquired the property from the prior owner at an unspecified point in time after defendant's tenancy began.

On November 2, 2009, plaintiff filed a summary dispossess complaint alleging defendant habitually remitted rental payments after the due date, which was the first of the month. At trial, plaintiff's agent, Esther Kaplan, testified that plaintiff's records showed defendant's rental payments were late in each of the preceding eight months. Notices to cease were issued on December 23, 2008, February 11, 2009 and April 8, 2009, each advising defendant that her past rental payments were late. Indeed, the April 8, 2009 notice to cease specified that neither the March nor April 2009 rent had yet been received as of the date the third notice to cease was issued. Each of the notices advised defendant that her past rental payments were late, demanded payment by the first day of the month, and warned defendant that she faced eviction if she did not comply.[1] Kaplan testified that all three notices to cease were sent by first-class and certified mail. She explained that each of the certified mail cards had come back to her signed by defendant. All three were received in evidence.

On August 28, 2009, plaintiff served a notice to quit upon defendant, advising her that she had disregarded the three earlier Notices to Cease. The Notice demanded that she vacate the apartment.

Defendant testified. She insisted that because she had moved into the apartment on the seventh day of the month, namely June 7, 1994, her prior landlord had agreed that her monthly rental payments would not be due until the seventh day of each succeeding month. She denied that any of her monthly rent payments were paid any later than that.

At the close of the evidence, the judge made his findings, concluding that, despite the lack of a written lease, the parties understood that rent was due on the first day of the month. He expressly rejected defendant's claims to the contrary. The judge observed that even if he were to accept defendant's version of when her rent was due, on the seventh day of the month, she paid the November 2008 rent significantly later, on November 13. The judge also noted that from January 2009 through April 2009, the situation deteriorated to the point where "the problem became almost unresolvable because thereafter every payment was virtually one month late." Additionally, the February 2009 check did not clear and therefore defendant's late payments persisted even after the third notice to cease was issued.

After finding that plaintiff had met all the applicable jurisdictional requirements, the judge determined that defendant had engaged in a pattern of "habitual late payment of rent" and the late payments continued despite the service upon defendant of the requisite Notices to Cease. The judge granted plaintiff a judgment for possession, and stayed the judgment pending appeal.

On appeal, plaintiff raises a single claim:


New Jersey's Anti-Eviction Act (Act), N.J.S.A. 2A:18-61.1 to -61.21, provides that no tenant may be removed from premises leased for residential purposes unless good cause is established. N.J.S.A. 2A:18-61.1. "The Act reflects a public policy barring dispossess actions except upon strict compliance with the notice and procedural requirements of the Act." 224 Jefferson St. Condo. Ass'n v. Paige, 346 N.J. Super. 379, 383 (App. Div.), certif. denied, 172 N.J. 179 (2002). "We have defined 'strict compliance' as 'punctilious' compliance with all of the Act's provisions, including the notice provisions." Ibid. As pertinent to this appeal, the Act authorizes eviction when the tenant, "after written notice to cease," has "habitually and without legal justification failed to pay rent which is due and owing." N.J.S.A. 2A:18-61.1(j). The landlord bears the burden of proving when the rent was due, when it was received, and that the statutory notices, required by N.J.S.A. 2A:18-61.2, were properly served upon the tenant.

Notice of the intended action is essential to the landlord obtaining a judgment of possession. First, a notice to cease must be sent providing a tenant with notice of the offending conduct and an opportunity to alter that conduct. RWB Newton Assocs. v. Gunn, 224 N.J. Super. 704, 709-10 (App. Div. 1988). Second, if the tenant does not cease the late payments, a notice to quit is mailed informing the tenant that the tenancy has been terminated and explaining the basis of the termination, thereby requiring the tenant to vacate the premises. See Carteret Props. v. Variety Donuts, Inc., 49 N.J. 116, 123 (1967). The Notice to Quit must "specify in detail the cause of the termination of the tenancy." N.J.S.A. 2A:18-61.2.

Accordingly, a landlord's failure to comply with the notice requirements negates the salutary purpose of the Act, precluding entry of judgment in favor of the landlord. Paige, supra, 346 N.J. Super. at 383-84. Because the Act "does not specify any limit on the number of months that must pass before the Notice to Cease becomes ineffective or must be reissued, nor does it state how many late payments of rent constitute 'habitual' late payment of rent under the statute[,]" the Court has instructed judges to apply "a flexible[,]" rather than a strict, time period so that a determination that the tenant's conduct is "habitual" becomes "a function of time and circumstances." A.P. Dev. Corp. v. Band, 113 N.J. 485, 495-96 (1988).

Applying the requirements of the Act, we are satisfied that the judge's findings of fact are well supported by evidence in the record and that his conclusions of law are unassailable. Plaintiff established an entitlement to a judgment for possession based upon defendant's habitual late payment of rent.

On appeal, plaintiff does not quarrel with the judge's findings on that subject. Instead, she advances a claim never presented in the Law Division, namely, she maintains that plaintiff never served her with notices to cease and therefore the court lacked jurisdiction to enter the judgment for possession. As we have noted, all three of the notices to cease were received in evidence by the judge at trial and the judge made a specific finding that all three had been properly served upon defendant. The notice to quit was also received in evidence. At no time did defendant deny receiving the notices to cease or the notice to quit. As defendant had the opportunity to raise the jurisdictional issue before the Law Division, but chose not to do so, we decline to consider this issue, raised for the first time on appeal. Nieder v. Royal Indemn. Ins. Co., 62 N.J. 229, 234 (1973) (observing, with exceptions not relevant here, that an appellate court will decline to consider an issue raised on appeal that was not presented to the trial court when an opportunity to do so existed).

The judgment for possession is affirmed. Remanded to the Law Division to vacate the stay of judgment.

[1] The December 23, 2008 notice specified that the September 2008 rent was paid on September 6, the October rent on October 7, the November rent on November 13 and the December rent on December 6, 2008. The February 11, 2009 notice stated that the January 2009 rent was paid on January 7 and the February rent had not been received as of February 11, 2009. The April 8, 2009 notice specified that the February 2009 rent was paid on March 2, 2009 and that the March and April 2009 rent had not been paid as of April 8, 2009.